Climate effects

Mitigation of climate change and support for adaptation to it are among Finnfund’s key objectives and development achievements. This is also reflected in Finnfund’s focus on climate change mitigation and adaptation activities, with investments in renewable energy, sustainable forestry, and agriculture and financial institutions. The last of these also includes funding for microfinance. Finnfund’s investments are also a key part of Finland’s official climate-related financing.

For example, in 2017 Finnfund made payments of a total of EUR 75.5 million to climate-related projects. Of this funding, 45.4% to the mitigation and 31.8% to adaptation, with the remaining 22.8% for both mitigation and adaptation.

In 2017, Finnfund commenced to calculate the climate impact of its entire investment portfolio annually.

Finnfund has previously assessed the potential for emissions reductions in forest and energy investments before making investment decisions. Today, the calculations are extended to cover all investments – both direct and indirect, new and existing, and relating to carbon footprints, avoided emissions and carbon sequestration. The comprehensive calculation of the investment portfolio provides an opportunity to analyse and develop the portfolio based on measurable and annually monitored quantitative data.

The starting point for the calculations are the guidelines of Greenhouse Gas Protocol. These take into account the direct and indirect emissions of each company’s own production and purchased services (scope 1 and 2, as well as 3 upstream), but not post-production use (scope 3 downstream). The impacts are attributed to Finnfund in proportion of its financing share. The calculations are made in cooperation with theconsultancy Navigant. There have also been discussions with other specialists and stakeholders.

The completed calculations, completed in autumn 2018, cover the entire 2016 investment portfolio, and calculations of the 2017 portfolio are ongoing. In addition, an assessment is being initiated of how the results are used in the development of Finnfund’s investment portfolio and investment operations.